President Tinubu Exempts Rent, Transport, Renewable Energy from VAT

 

In a significant move aimed at alleviating the economic burden on households, President Bola Tinubu has announced major Value Added Tax (VAT) exemptions, targeting essential services and goods. The President revealed these crucial policy changes in his second-year anniversary statement, highlighting a commitment to easing the cost of living for ordinary Nigerians.

Under the new directives, rent, public transportation, and renewable energy will now be fully exempt from paying VAT. This measure is designed to directly reduce household expenses in critical areas of daily life. Furthermore, essential goods and services such as food, education, and healthcare will now attract a 0% VAT rate, ensuring that basic necessities remain more affordable.

President Tinubu emphasized that these reforms are a core part of his administration's bold tax reform agenda, which he stated is "already yielding results." He pointed to a remarkable leap in the nation's tax-to-GDP ratio, rising from 10% to over 13.5% by the end of 2024, a testament to deliberate improvements in tax administration and policy.

"We are eliminating the burden of multiple taxation, making it easier for small businesses to grow and join the formal economy," President Tinubu stated. He further explained that the tax reforms are designed to protect low-income households and boost workers' disposable income.

The President also pledged to end the era of "wasteful and opaque tax waivers," replacing them with targeted and transparent incentives for high-impact sectors like manufacturing, technology, and agriculture. He asserted that these reforms are not just about revenue generation but about stimulating inclusive economic growth.

Key initiatives mentioned include a focus on youth empowerment through a "friendlier tax environment for digital jobs and remote work," export incentives to boost global competitiveness for Nigerian businesses, and the National Single Window project to streamline international trade.

To foster fairness and accountability, the President announced the establishment of a Tax Ombudsman, an independent institution dedicated to protecting vulnerable taxpayers, particularly small businesses, and ensuring a just tax system.

"Most importantly, we are laying the foundation for a more sustainable future by introducing a new national fiscal policy," President Tinubu concluded. "This strategic framework will guide our approach to fair taxation, responsible borrowing, and disciplined spending. These reforms are designed to reduce the cost of living, promote economic justice, and build a business-friendly economy that attracts investment and supports every Nigerian. Together, we are creating a system where prosperity is shared, and no one is left behind."

This announcement is expected to bring significant relief to millions of Nigerians grappling with economic pressures, marking a pivotal step in the government's efforts to foster a more equitable and prosperous economy.